The government has announced plans to crack down on pension scams, with figures showing that fraudsters tricked savers out of nearly £5m in the first five months of 2017.
With victims of pension scams losing nearly £15,000 on average, the government has emphasised the need for tougher preventative measures to protect consumers.
As part of the crackdown, plans include the following:
The cold calling ban will include exemptions to ensure consumers can access information and updates from trusted sources. If a consumer has requested information from a particular firm, calls from the business to the consumer will not be banned.
The government is also insisting that companies produce regular, up-to-date accounts in order to avoid falling foul of the new pension scam crackdown.
When transferring pension pots from one occupational scheme to another, checks must be made by trustees to ensure the new scheme is regulated by the Financial Conduct Authority (FCA), has an active employment link with the individual or is an authorised master trust.
New pension freedoms introduced in 2015 have enabled millions of savers to access their pension pots without having to purchase an annuity. Many people have used this flexibility to take their pension fund as a lump sum before placing it in savings or investments.
Although this flexibility has given many people control and independence when it comes to using their savings effectively, some have been duped into placing their money into non-existent investment vehicles. Victims of pension scams are often tricked into parting with their cash by promises of high returns, only to lose all their money at the hands of fraudsters.
The government said new figures show nearly £5m was obtained by scammers targeting private pensions in the first five months of 2017. It’s estimated that £43m has been stolen since April 2014.
The minister for pensions and financial inclusion, Guy Opperman, said: “These figures highlight the extent to which people’s savings are being targeted and stolen through elaborate hoaxes – leaving them with little opportunity to build up their savings again. That is why we are introducing tough new measures for those who scam.
“If people have saved for a private pension, we want to protect them. This is the biggest lifesaving that individuals normally make over many years of hard work.
“By tackling these scammers, people should know that cold calling, apart from exceptional circumstances, is banned.”